Specialist insurer Pension Insurance Corporation has agreed a £130m forward funding deal with Muse Developments, Network Rail and Manchester City Council at New Victoria in Manchester.
PIC’s first build-to-rent acquisition was reported by EG earlier this year, and comes two years after a mooted entry to the emerging sector. To date, the insurer has focused on long-dated loans to housing associations in the regions.
PIC has now acquired 520 flats at the £185m scheme at New Victoria, next to Victoria Station, on 2.5 acres of surplus land surrounding the station on Corporation Street. The deal has been in negotiations for around 18 months and is expected to complete in August.
New Victoria comprises two towers of 20 and 25 storeys. The residential floorspace spans 450,000 sq ft, and estimated annual rents of £7.7m, with pricing reflecting a net initial yield of around 4.25-4.5%.
The long-awaited development has been kick-started by a £10m grant from Homes England’s Housing Infrastructure Fund last year.
Muse will now proceed with development, having secured investment and signing Vinci as contractor. It will start the three-year build next month.
The vendors were advised by Savills. PIC was advised by Colliers International and Bishopsfield Capital Partners.
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